with organised retail expected to garnera 10% share by 2010 from a mere 3% share at present
. respectively.CO N S U M E R D U R A B L E S
October 2007
Several key trends are driving growth in the sector
Income growth and availability of financing • Disposable income levels are rising and consumer financing has become easier Increased affordability of products • Advanced technology and increasing competition are narrowing the price gap and the once expensive appliances are becoming cheaper Increasing share of organised retail • Urban and rural markets are growing at the annual rates of 7%–10% and 25%.

CO N S U M E R D U R A B L E S
October 2007
Several key trends are driving growth in the sector
Entry of heavyweight retail players is increasing competition • Competitive evolution of organised retail due to the entry of heavyweight players like Croma. E Zone and Reliance Digital is stimulating the demand through exposure to experiences Increasing appreciation of the Rupee • Raw materials constituting almost 75% of the costs are mostly imported and will now be cheaper
.

Growth of 97% in 2006-07 as compared to a 32% growth of window ACs
.CO N S U M E R D U R A B L E S
October 2007
Some of the attractive areas for investment include
High End Colour TVs • Plasma display panels and liquid crystal display TVs have registered an average growth of more than 250% in 2006-07 and the trend is expected to continue Split Air-conditioners • Split ACs have been growing at a much faster rate than window ACs .

the need to have a strong distribution network is crucial for the companies to remain price competitive
.3% from 31 million units in 2006 to 107 million units in 2011 • Low mobile penetration and favourable government policies are driving mobile phone Original Equipment Manufacturers (OEMs) to set up manufacturing facilities in India Distribution and Retail • With the rural and semi-urban markets creating opportunity and an almost sedentary urban market.CO N S U M E R D U R A B L E S
October 2007
Some of the attractive areas for investment include
Mobile Phones • Production is expected to grow at a compound annual growth rate (CAGR) of 28.

with competition from strong Indian players
Some of the key players in the sector in India include: • Samsung • Philips • LG • Whirlpool • Nokia • Sony
.CO N S U M E R D U R A B L E S
October 2007
Several global players are well established in the Consumer Durables sector in India.

distribution and design R&D • Parent company is always ready to invest more in India
.CO N S U M E R D U R A B L E S
October 2007
A successful MNC in India – Sample case
Situation Mobile phone landscape in 1995 was one open business opportunity for all the players to capture and succeed Nokia’s Key Strategy • Being focused and ahead of the curve • Invested in each vertical of the handset ecosystem manufacturing.

CO N S U M E R D U R A B L E S
October 2007
A successful MNC in India – Case Study
Key Success Factors Strong Distribution Network • India has some 95.000 outlets that sell mobile phones with a conservative estimate of 50. the key focus is the Mother Brand – Nokia
.000 of them selling only Nokia Manufacturing Edge • Nokia has several R&D centres and labs in India including a $150 million handset manufacturing facility in Chennai set up in 2005 The Mother Brand • Whether it is N series or the E series.

CO N S U M E R D U R A B L E S
October 2007
A successful MNC in India – Case Study
Key Success Factors Local Products • Custom-made mobiles for Indian conditions: Nokia 1100. having a torch built into a mobile phone helps in a country with frequent power cuts .distinct and tangible benefit Such examples highlight the Key Success Factors to succeed in the Indian market
.

production facilities located near ports to import cheaper raw materials could provide an advantage
. distribution network and brand recognition will continue to play more significant roles Attractive Locations • With raw materials forming a significant chunk of costs.CO N S U M E R D U R A B L E S
October 2007
Success in the industry would depend on addressing key factors
Distribution and Service Network • From saturated urban regions to low penetration rural areas and tier II/III towns.

which includes developing special purpose products and comfort applications
. 4 modern manufacturing facilities and around 2.CO N S U M E R D U R A B L E S
October 2007
Profiles of Key Indian Consumer Durables Players
Bluestar • Largest central air conditioning company with a network of 23 offices.000 employees • Established leadership in the field of commercial refrigeration equipment ranging from water coolers to cold storages • The company plans to increase its production capacity by setting up a new manufacturing plant at Thane and enhance its product range.

CO N S U M E R D U R A B L E S
October 2007
Profiles of Key Indian Consumer Durables Players
MIRC Electronics • Commands strong brand equity among consumers. largely owing to the success of its Onida brand • Finest design has made the company a leading player in the electronics and entertainment business today • Planning to set up a manufacturing plant in Uttaranchal for manufacturing various consumer electronic products
.

unitary products. materials handling. machine tools. textile machinery. indoor air quality and chemicals • Operations have been organiaed into 4 independent business specific clusters: air conditioning and refrigeration.CO N S U M E R D U R A B L E S
October 2007
Profiles of Key Indian Consumer Durables Players
Voltas • Offers engineering solutions in areas such as heating. mining and construction equipment. engineering products and international operations • Tied up with RBS Home Appliances Ltd for the use of 640 service centres that Voltas has across the country for after sales services
. ventilation and air conditioning. building management systems. water management. refrigeration. electro-mechanical projects.

telecom towers. which will be marketed under its own brand • Planning to introduce inverters and 2 new lines of business
.CO N S U M E R D U R A B L E S
October 2007
Profiles of Key Indian Consumer Durables Players
Bajaj Electricals • Engaged in marketing of various consumer household and industrial goods • Manufactures erection and commissioning of transmission line towers. mobile telecom towers and wind energy towers • Planning to outsource manufacturing of gas appliances and water dispensers.

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www. the content is not to be construed in any manner whatsoever as a substitute for professional advice. Neither the Author nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation. All rights reserved. The Author and IBEF neither recommend or endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed in this presentation. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of the Author’s and IBEF’s knowledge and belief. The same may not be reproduced.org
.ibef.CO N S U M E R D U R A B L E S
October 2007
DISCLAIMER
This presentation has been prepared jointly by the India Brand Equity Foundation (“IBEF”) and KPMG Advisory Services Private Limited (“Author”).